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Lukas Ruflin's first move as the new CEO of Leonteq was to hit shareholders with a big cash call and stop payouts for the foreseeable future. He tells finews.asia why, and outlines the derivatives boutique's prospects in Asia.

Lukas Ruflin, co-founder and CEO of Leonteq, is setting heavy accents soon after taking the top job at the structured products boutique: he wants to bolster capital under a project dubbed SHIP, for smart hedging and issuance platform. The move is meant to spare the Swiss firm's balance sheet of hedging by offering clients a link directly to investment banks – should its issuer clients so choose.

Leonteq is poised to clinch its turnaround with the better-than-expected results and a promising expansion into Asia. But on Thursday, Ruflin took investors by surprise with a 165 million Swiss franc ($164.9 million) cash call (he and co-founder Sandro Dorigo own 8.05 percent and 2.45 percent of Leonteq and will participate in the cap hike, he said). The firm also said it is striking dividends for now – pushing the shares down by more than 10 percent on Thursday.

 Lukas Ruflin, your first major undertaking as new Leonteq CEO was a capital increase. Shareholders won’t like that, will they?

Given our solid business performance, one can assume our growth prospects are intact. We have to improve our capital efficiency, which we intend to do with the SHIP project. This will however take time, and we will need investment from our counterparties.

What if the project takes longer than the expected 18 to 24 months?

That’s no problem: the capital increase will allow us to grow comfortably. We don’t however expect any delays with SHIP.

So the capital increase is a form of insurance for you?

We're not insuring against a delay of SHIP. It does however depend on our clients and the market conditions: just how quickly the demand for structured products grows.

«The capital market currently finds itself uncertain about the shares»

We want to be able to offer our clients products from each market sector.

The market hasn’t approved the move, and the Leonteq share has dropped by more than 10 percent.

The capital market is always right, and currently finds itself uncertain about the shares. We'll let investors make the definitive assessment of the move.

The shareholders are also disappointed that no dividend will be paid.

That’s understandable. We assume that the additional capital can be reinvested with a profit for our shareholders.